When I first heard about twitter I mostly ignored it like I ignored Instant Message. I have better things to do with my time than watch what other people are doing. IM always seemed to be just another source of interruptions. I shut down my email much of the time and check it when I'm not doing something more important. If people need to contact me urgently they can phone (unless I have turned my phone off... which I do).
Actually I even filter emails into ones that are addressed to me and ones that are only CC'd to me. The CC ones go into a different folder. I only check those when I am bored. Given some of the people I work with only seem to know about the 'reply all' button this saves me a lot of time. It is also quite nice to just clear that folder, knowing there is never anything important in it.
But back to Twitter. I work in a team spread over different locations. When time gets tight there are a lot of 'where are you up to?' emails from project managers. They like to have conference calls too, not quick ones either. It gobbles up time like crazy. So I started using twitter. If they want to find out what I'm up to they can check that. Saves a lot of back and forth.
Even more useful, I RSS my own Twitter into my email (this is simple enough on Thunderbird, probably on other email clients too). It seems narcissistic, but this gives me a simple way to track what I am doing. It comes in handy for filling out timesheets. The Twitter page itself is not very clear as to what time an entry was made, but the email always has a timestamp. It doesn't have to be dead accurate.
I could write a small application to do this, but it wouldn't tell my project manager what I am doing. Twitter manages both. I like the succinct format, just a few characters to say what I need and move on. Works for me.